Offer in Compromise 101: Understanding the Process and Guidelines of Submitting and Acceptance of an Offer in Compromise

Offer in Compromise 101: Understanding the Process and Guidelines of Submitting and Acceptance of an Offer in Compromise

Working with the IRS, rather than against it, is both an art and a science. Part of the process requires good record keeping, good tax advice, the right entity set-up, proper tax returns, good internal controls and much, much more. Care should be exercised in all levels to be sure sound and proper business decisions are being reached on a daily basis along with making sure that you qualify for an Offer in Compromise is submitted. In general terms an Offer in Compromise is:

-Where you and the IRS "contract" to reduce your taxes based upon your promise of payment of a certain reduce amount and your commitment to stay current on your filings and payments for five years.
- If you fail to stay current on your filings and payments for five years after the acceptance of your Offer of Compromise, the previously abated monies, penalties and interest will be reinstated and collection efforts resumed.
-You attest that all of your tax filings are current.
-The amount offered is the most you can pay and is a combination of your net worth and your excess cash flows over the next five years discounted into today's dollars.
-That any federal refunds during the years of processing and the acceptance of your Offer will be forfeited to the IRS.

Having processed successfully many Offers in Compromise as an Atlanta CPA I have learned that no two are alike and both the CPA and the client need to stand ready to address any and all issues that come their way.

John Dillard is a Christian Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta CPA firm) and for his latest book Overcoming Life's 9/11's: Job's Journey and to learn about his ministry visit http://www.john-dillard.com/